Minor losses are an everyday affair for all businesses. They are as important as maintaining profitability for your business.
It might look strange, but minor losses in your business keep you vigilant about business operations and on the lookout for possible solutions and innovations. But things get pretty out of hand when the loss is so huge that it rattles your whole business.
It is mind-shattering to know that the entire ship carrying goods got lost in the sea or giant waves took it to the bottom. The situation is financially devastating too.
So, what can you do to bypass such a loss from happening to your business?
A simple answer is cargo insurance.
Cargo insurance provides complete protection to your goods while in transit through air, road, vessel, road, post, or other means of conveyance. The cargo insurance provides you with money for all the goods you have insured.
Delayed or lost goods are already a burden for the business as they can put the company operations on hold. But with cargo insurance, you at least get your money back.
Some of the reasons for making cargo insurance mandatory for businesses include the following.
- Minimize your financial losses
The biggest benefit of buying cargo insurance is to minimize your financial losses. The financial help you get from cargo insurance includes protecting your goods from damages and getting compensated if something happens through the cargo insurance policy.
Moreover, you get professional cargo staff service and a simplified reporting process.
Countries like the US, the UK, and other developed nations have made cargo insurance easy for businesses. If you are unsure of finding a reliable company in your country, do an online search.
US-based manufacturers or businesses can search “cargo insurance us” and find many different options. They can contact a few companies and enquire about the details.
Most high-profile companies provide single-point access for purchasing the policy and cost-effective and reliable solutions for protecting your goods.
- Cargo insurance provides all-risk coverage
All risk coverage is the protection that a shipper receives against circumstances beyond their control. These outside forces and external circumstances call for an external help of a cargo insurance company.
The shipper can get the insurance for the following:
- Customer refusal
- Infestation of insects or varmin
- Employee theft and deceit
- Cargo and shipment desertion
- Custom may refuse that it is not suitable for delivery
The benefit of an all-risk policy is that it is very versatile. The insurance company can discuss the packages and policy options most appropriate for your requirements based on the category of goods you are shipping through various routes.
- You have someone to hold accountable for your losses
Accountability is an essential feature of having cargo insurance. If you have no protection from a third party against unforeseen circumstances, you cannot hold anyone accountable for your losses.
If the company fails to protect your goods from all the damages written in your policy, you can drag them to court and corroborate your case with the policy documents you have.
All the customers buying the insurance policies must have all the documents until goods reach their destination safely and are checked against the inventory records. Failure to produce legal documents makes you unentitled to a lawsuit.
- Insurance is the invisible shield for your goods
When they know about your insurance, no company can think of mishandling your goods—throwing packages, breaking delicate stuff. Your cargo insurance policy makes them liable for paying thousands of dollars for damages if they do so.
Simultaneously, you must also convey to the company if your load consists of delicate goods such as those made with glass or are antique.
Damaging such stuff can cost them a fortune. If you have purchased extensive coverage, the company is responsible for protecting your goods until they reach their final destination.
- You can attend to other facets of your business
Thinking about how your goods are being shipped and if they are safe from natural and made-made hazards can be so nerve-wracking. The resultant mental distress impairs your ability to focus on other business aspects that need your attention.
Cargo insurance provides peace of mind in this scenario. You can be sure that professionals are managing the safety of your goods and you will receive them in the perfect condition.
Now that we know the benefits of cargo insurance, below are the types of cargo insurance you can consider when purchasing a policy.
Land cargo insurance
As the name implies, this insurance is for goods transported through land routes. Modes of transportation include trucks, small utility vehicles, containers, etc.
Often the scope of this land cargo insurance is within national boundaries. Therefore, you can buy it for domestic shipments as well.
Marine cargo insurance
This type of insurance protects your goods transported through air and sea routes. This policy can defend your goods against loading and unloading damages, theft and piracy, weather upheavals, in-transport damage, and losses.
Marine cargo insurance is further divided into the following:
- Open coverage: This type of marine cargo insurance covers your goods’ protection for a specific time, let’s say, one year. This policy is suitable for businesses engaged in frequent shipping activities. Open coverage has two types: Renewable and Permanent.
- The renewable coverage policy renews on its own after goods reach their destination. It is more suitable for single trips and voyages. Contrary to this is the permanent coverage policy, which allows for unlimited shipments within a specific time.
Specific coverage is another name for single coverage. It covers the safety of the cargo for one shipment only. This is suitable for customers not engaged with frequent shipments.
Cargo insurance is a necessary expense for a business engaged in shipment of goods through the land, air, and sea routes. In the event of no insurance, your goods are at the mercy of the carriers, and no one can be held responsible for any theft or damage. Delivering damaged goods to the buyers can tarnish the reputation of your business.
Moreover, who will recuperate the bottleneck when the entire shipment gets lost or is damaged due to a sea storm or a cargo aircraft crash? These questions make a reliable case to opt for cargo insurance for the survival of your business.